The report said extremist groups may try to attract veterans returning from the wars in Iraq and Afghanistan. It also said extremists also may use the recession and the election of the nation's first African-American president to recruit members.

The American Legion was among those who objected to the report's mention of veterans.

"I think it is important for all of us to remember that Americans are not the enemy. The terrorists are," the American Legion's national commander, David K. Rehbein, said in a letter to Napolitano.

Napolitano apologized on CNN on Thursday morning.

"I know that some veterans groups were offended by the fact that veterans were mentioned in this assessment, so I apologize for that offense. It was certainly not intended," she told CNN's "American Morning."

Glen M. Gardner Jr., the national commander of the 2.2 million-member VFW, said the assessment "should have been worded differently" but served a vital purpose.

"A government that does not assess internal and external security threats would be negligent of a critical public responsibility," he said in a statement.

The report mentioned numerous factors that could strengthen right-wing extremists, including anger over illegal immigration and the poor economy.

Yet it was the section on veterans that caused controversy among conservative politicians and some veterans. It said "the return of military veterans facing significant challenges reintegrating into their communities could lead to the potential emergence of terrorist groups or lone-wolf extremists capable of carrying out violent attacks." It cited Timothy McVeigh, who returned from military service and went on to bomb the federal building in Oklahoma City, Oklahoma, in 1995.

"Timothy McVeigh was only one of more than 42 million veterans who have worn this nation's uniform during wartime," wrote Rehbein, the American Legion commander. "To continue to use McVeigh as an example of the stereotypical 'disgruntled military veteran' is as unfair as using Osama bin Laden as the sole example of Islam."

The report, which was prepared in coordination with the FBI, was published last week. It was distributed to federal, state and local law enforcement officials. Mainstream media outlets picked up the story after it was reported by conservative bloggers. Watch how the report sparked objections »

Though the nine-page report said it had "no specific information that domestic right-wing terrorists are currently planning acts of violence," it said real-estate foreclosures, unemployment and tight credit "could create a fertile recruiting environment for right-wing extremists and even result in confrontations between such groups and government authorities similar to those in the past."

The report compared the current climate with that of the 1990s, saying a recession, criticism over outsourcing of jobs, and a perceived threat to U.S. power at that time fueled a "resurgence" of right-wing extremism.

However, it said, "Despite similarities to the climate of the 1990s, the threat posed by lone wolves and small terrorist cells is more pronounced than in past years."

It warned that the groups may use proposed restrictions on firearms and the debate on immigration as recruiting tools, and said the groups may try to reach out to veterans returning from the wars in Iraq and Afghanistan.

Radio talk show host Rush Limbaugh decried the report on Tuesday, saying, "There is not one instance they can cite as evidence where any of these right-wing groups have done anything," according to a transcript of his remarks on his Web site.

"You have a report from Janet Napolitano and Barack Obama, Department of Homeland Security, portraying standard, ordinary, everyday conservatives as posing a bigger threat to this country than al Qaeda terrorists or genuine enemies of this country like Kim Jong Il," he said, referring to the leader of North Korea.

Michael Savage, another conservative commentator, also criticized the report.

"What does Big Sis say these right-wingers are concerned about?" he wrote on his Web site, referring to Napolitano.

"Illegal aliens, the increasing power of the federal government, gun grabs, abortion and the loss of U.S. national sovereignty. In other words, anyone who is worried about preserving our borders, language, and culture is on Big Sis' watch list."

In a written statement Wednesday, Napolitano said the agency is on "the lookout for criminal and terrorist activity but we do not -- nor will we ever -- monitor ideology or political beliefs."

She said she was "briefed" on the general topic, which "struck a nerve as someone personally involved in the Timothy McVeigh prosecution."

Napolitano said in her statement that she will tell Rehbein face-to-face that the Department of Homeland Security honors veterans and employs thousands of them, including Deputy Secretary Jane Holl Lute.

The Obama administration in January issued a warning about left-wing extremists. Both reports were initiated during the administration of former President George W. Bush.